LivePerson has released its 2023 State of Customer Engagement report, which sheds light on the perspectives of businesses and customers regarding digital experiences, conversational commerce, and chatbots and AI.
The report highlights significant disparities between how businesses approach customer engagement and what their customers desire. The study shows that brands can bridge the divide by delivering tailored experiences, relying on conversational tools instead of cookies, and utilizing AI to enhance engagement.
Although brands may assume that customers will be more forgiving during challenging times, the reality is quite the opposite. In fact, as brands struggle to hire and reduce expenses, which often results in reduced engagement quality, , 62% of consumers are now more critical of how brands engage with them than they were a year ago.
The report shows that customers have become more sensitive to long wait times, with 57% of them considering it a more important factor in customer engagement than a year ago. However, 77% of brands believe otherwise.
Moreover, 40% of consumers would switch to a competitor if their favorite brand took longer than 30 minutes to respond, indicating that quick response times are critical for retaining customer loyalty.
Personalization drives purchasesPersonalized experiences are a key factor in encouraging consumers to make purchases, particularly for Gen Z. As many as 81% of those aged 18-24 stated they are more likely to buy from a brand that they feel connected to. Still, the traditional personalization method involving tracking and monitoring customer behavior can be off-putting to customers.
Moreover, the report shows that while 81% of brands believe that using cookies to track customer activity is vital for effective personalization, more than half of customers (58%) do not want this.
Additionally, 50% of brands wrongly assume that consumers prefer cookies to direct communication, while only 69% of consumers are comfortable with this method.
"There's a number of sharp disconnects between brands and consumers when it comes to customer engagement. While brands give themselves high marks, their customers are actually getting more impatient. Luckily for brands, consumers report they're looking for personalization, conversation, and automation — all of which are achievable through smart use of AI," said Rob LoCascio, founder and CEO, LivePerson.
AI's rosy future
Consumers have a positive view of messaging and AI, but companies have not yet fully taken advantage of the potential benefits. The report highlights that customers, particularly Gen Z, have a positive attitude towards messaging and AI when engaging with brands. As many as 75% (83% aged 18-24) of customers prefer messaging over calling when it comes to their preferred communication channels with brands.
Customers of all ages are increasingly drawn to experiences that involve automation and AI, which can help boost brand loyalty. In fact, 62% of consumers have a positive view of chatbots, and 68% say that communicating with automation to resolve issues faster increases their loyalty to a brand. Notably, 60% of those aged 18-24 prefer interacting with chatbots instead of humans when searching for products.
The report indicates that businesses are aware of the importance of using automation and AI, and many are actively working to enhance their strategies. When asked whether they are evaluating or planning to implement AI or automated solutions for customer engagement within the next six months, 89% responded with a "yes". Furthermore, 85% of brands acknowledged the crucial role of AI in their customer engagement strategies.
However, there is a noticeable gap between how brands perceive their use of AI and how customers experience it. While 78% of brands rated themselves as excellent or good in terms of their use of AI, only 43% of consumers consider brand chatbots to be easy to use.
Meanwhile, LivePerson has recently added enhancements to its Conversational Cloud platform to help enterprise brands leverage Generative AI and Conversational AI to drive better business outcomes.
"With positive sentiment toward AI at a record high, and Generative AI in particular creating a groundswell of excitement, it should trouble brands that less than half of their customers currently find chatbots easy to use. When it comes to using AI to drive better business outcomes, It's clear that there's significant room for improvement. Brands should be mindful of the fast-evolving AI landscape and learn about emerging capabilities that can help them continuously draw insights and elevate customer experiences," said Ruth Zive, CMO at LivePerson.